Consumers could outspend utilities on renewable energy, according to study

Consumers could spend more than utilities on the adoption of solar, storage, electric vehicles and other distributed energy resources (DERs) in the future, according to a new case study from the Smart Electric Power Alliance (SEPA) and Black & Veatch.

The study examined the efforts of the Sacramento Municipal Utility District (SMUD) to develop an integrated DER planning process. SMUD built a customer database through an in-depth study of its customers’ adoption of DERs, which allowed the utility to predict what areas will have higher levels of DER adoption. SMUD will also use the database to predict how the DERs might impact its distribution and bulk power systems as well as its utility’s finances.

“An increasing number of utilities are integrating distributed technologies onto the grid, but with this study, SMUD has become an industry leader, providing insights and models that others can follow,” SEPA President and CEO Julia Hamm said. “We believe that integrating DERs into regular utility resource planning, as SMUD is doing, will quickly become an industry best practice.”

The results of this case study show that track and integrate customer adoption of DERs into their planning processes, SEPA said. It also shows that the effects of DERs should be considered both individually and in comprehensively. Solar alone can increase ramping requirements, but the DER portfolio simulated in the SMUD study reduced ramping and flattened the utility’s net load profile.

The case study also found that under SMUD’s current rate structure, its lost revenue and program costs for most DER technologies will outweigh its cost savings on the bulk system. Therefore, changes to rates and business models must be considered.

“This case study demonstrates that integrated DER analysis can identify potential problems, make utility planning processes more robust, and improve utility-customer relations through better policies and programs,” Jeremy Klingel, senior managing director for Black & Veatch’s management consulting business, said. “But it will need to be a regular part of utility planning, and that will require organizational change and solid investments in analytics, databases and other IT infrastructure.”